10-Q 1 vishayintertech_10q.htm QUARTERLY REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended           July 2, 2022

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 011-07416

Vishay Intertechnology, Inc.
(Exact name of registrant as specified in its charter)

Delaware  
38-1686453
(State or Other Jurisdiction of Incorporation)
  
(I.R.S. Employer Identification Number)
     
63 Lancaster Avenue
Malvern, Pennsylvania 19355-2143
  
610-644-1300
(Address of Principal Executive Offices)
  
(Registrant’s Area Code and Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:
       
 
Title of each class
Trading symbol
Name of exchange on which registered
  
  Common stock, par value $0.10 per share VSH New York Stock Exchange LLC  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
☒Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 
Large Accelerated Filer ☒
Accelerated filer ☐
 
Non-accelerated filer ☐
Smaller reporting company ☐
 
Emerging growth company ☐
  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes  ☒ No

As of July 29, 2022 the registrant had 130,680,319 shares of its common stock (excluding treasury shares) and 12,097,148 shares of its Class B common stock outstanding.





















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2
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q
July 2, 2022
CONTENTS

     
Page Number
   
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
     
3

PART I  - FINANCIAL INFORMATION

Item 1. Financial Statements

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)

   
July 2, 2022
    
December 31, 2021
  
   
(Unaudited)
        
Assets
            
Current assets:
            
Cash and cash equivalents
  
$
765,593
    
$
774,108
  
Short-term investments
    
81,112
      
146,743
  
Accounts receivable, net
    
429,778
      
396,458
  
Inventories:
                
Finished goods
    
172,796
      
147,293
  
Work in process
    
264,123
      
226,496
  
Raw materials
    
196,929
      
162,711
  
Total inventories
    
633,848
      
536,500
  
                 
Prepaid expenses and other current assets
    
160,089
      
156,689
  
Total current assets
    
2,070,420
      
2,010,498
  
                 
Property and equipment, at cost:
                
Land
    
73,047
      
74,646
  
Buildings and improvements
    
629,015
      
639,879
  
Machinery and equipment
    
2,750,175
      
2,758,262
  
Construction in progress
    
147,345
      
145,828
  
Allowance for depreciation
    
(2,629,014
)
    
(2,639,136
)
Property and equipment, net
    
970,568
      
979,479
  
                 
Right of use assets
    
111,881
      
117,635
  
                 
Deferred income taxes
     89,181       95,037  
                 
Goodwill
    
164,295
      
165,269
  
                 
Other intangible assets, net
    
62,698
      
67,714
  
                 
Other assets
    
94,550
      
107,625
  
Total assets
  
$
3,563,593
    
$
3,543,257
  

Continues on following page.
4

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

   
July 2, 2022
    
December 31, 2021
  
   
(Unaudited)
        
Liabilities and equity
            
Current liabilities:
            
Trade accounts payable
  
$
243,496
    
$
254,049
  
Payroll and related expenses
    
160,415
      
162,694
  
Lease liabilities
    
22,734
      
23,392
  
Other accrued expenses
    
214,865
      
218,089
  
Income taxes
    
62,592
      
35,443
  
Total current liabilities
    
704,102
      
693,667
  
                 
Long-term debt less current portion
    
463,302
      
455,666
  
U.S. transition tax payable
    
83,010
      
110,681
  
Deferred income taxes
    
49,542
      
69,003
  
Long-term lease liabilities
    
92,208
      
99,987
  
Other liabilities
    
88,554
      
95,861
  
Accrued pension and other postretirement costs
    
242,464
      
271,672
  
Total liabilities
    
1,723,182
      
1,796,537
  
                 
Equity:
                
Vishay stockholders' equity
                
Common stock
    
13,291
      
13,271
  
Class B convertible common stock
    
1,210
      
1,210
  
Capital in excess of par value
    
1,350,620
      
1,347,830
  
Retained earnings
    
588,803
      
401,694
  
   Treasury stock (at cost)
     (36,161 )     -  
Accumulated other comprehensive income (loss)
    
(80,344
)
    
(20,252
)
Total Vishay stockholders' equity
    
1,837,419
      
1,743,753
  
Noncontrolling interests
    
2,992
      
2,967
  
Total equity
    
1,840,411
      
1,746,720
  
Total liabilities and equity
  
$
3,563,593
    
$
3,543,257
  

See accompanying notes.
5

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Fiscal quarters ended
  
   
July 2, 2022
    
July 3, 2021
  
             
Net revenues
  
$
863,512
    
$
819,120
  
Costs of products sold
    
602,289
      
589,848
  
Gross profit
    
261,223
      
229,272
  
                 
Selling, general, and administrative expenses
    
110,400
      
103,900
  
Operating income
    
150,823
      
125,372
  
                 
Other income (expense):
                
Interest expense
    
(4,307
)
    
(4,443
)
Other
    
1,380
   
(3,749
)
Total other income (expense)
    
(2,927
)
    
(8,192
)
                 
Income before taxes
    
147,896
      
117,180
  
                 
Income tax expense
    
35,127
      
23,799
  
                 
Net earnings
    
112,769
      
93,381
  
                 
Less: net earnings attributable to noncontrolling interests
    
381
      
189
  
                 
Net earnings attributable to Vishay stockholders
  
$
112,388
    
$
93,192
  
                 
Basic earnings per share attributable to Vishay stockholders
  
$
0.78
    
$
0.64
  
                 
Diluted earnings per share attributable to Vishay stockholders
  
$
0.78
    
$
0.64
  
                 
Weighted average shares outstanding - basic
    
143,996
      
145,017
  
                 
Weighted average shares outstanding - diluted
    
144,397
      
145,445
  
                 
Cash dividends per share
  
$
0.100
    
$
0.095
  

See accompanying notes.
6

VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)

   
Fiscal quarters ended
  
   
July 2, 2022
    
July 3, 2021
  
             
Net earnings
  
$
112,769
    
$
93,381
  
                 
Other comprehensive income (loss), net of tax
                
                 
Pension and other  post-retirement actuarial items
    
1,365
      
2,020
  
                 
Foreign currency translation adjustment
    
(49,532
)
    
9,285
  
                 
Other comprehensive income (loss)
    
(48,167
)
    
11,305
  
                 
Comprehensive income
    
64,602
      
104,686
  
                 
Less: comprehensive income attributable to noncontrolling interests
    
381
      
189
  
                 
Comprehensive income attributable to Vishay stockholders
  
$
64,221
    
$
104,497
  

See accompanying notes.
7

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Six fiscal months ended
  
   
July 2, 2022
    
July 3, 2021
  
             
Net revenues
  
$
1,717,305
    
$
1,583,752
  
Costs of products sold
    
1,196,974
      
1,151,531
  
Gross profit
    
520,331
      
432,221
  
                 
Selling, general, and administrative expenses
    
223,255
      
209,585
  
Operating income
    
297,076
      
222,636
  
                 
Other income (expense):
                
Interest expense
    
(8,529
)
    
(8,819
)
Other
    
(4,371
)
    
(9,480
)
Total other income (expense)
    
(12,900
)
    
(18,299
)
                 
Income before taxes
    
284,176
      
204,337
  
                 
Income tax expense
    
67,457
      
39,313
  
                 
Net earnings
    
216,719
      
165,024
  
                 
Less: net earnings attributable to noncontrolling interests
    
758
      
397
  
                 
Net earnings attributable to Vishay stockholders
  
$
215,961
    
$
164,627
  
                 
Basic earnings per share attributable to Vishay stockholders
  
$
1.49
    
$
1.14
  
                 
Diluted earnings per share attributable to Vishay stockholders
  
$
1.49
    
$
1.13
  
                 
Weighted average shares outstanding - basic
    
144,527
      
144,992
  
                 
Weighted average shares outstanding - diluted
    
144,978
      
145,453
  
                 
Cash dividends per share
  
$
0.20
    
$
0.19
  

See accompanying notes.

8

VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)

   
Six fiscal months ended
  
   
July 2, 2022
    
July 3, 2021
  
             
Net earnings
  
$
216,719
    
$
165,024
  
                 
Other comprehensive income (loss), net of tax
                
                 
Pension and other post-retirement actuarial items
    
2,924
      
3,884
  
                 
Foreign currency translation adjustment
    
(63,016
)
    
(17,664
)
                 
Other comprehensive income (loss)
    
(60,092
)
    
(13,780
)
                 
Comprehensive income
    
156,627
      
151,244
  
                 
Less: comprehensive income attributable to noncontrolling interests
    
758
      
397
  
                 
Comprehensive income attributable to Vishay stockholders
  
$
155,869
    
$
150,847
  

See accompanying notes.
9

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)

   
Six fiscal months ended
  
   
July 2, 2022
    
July 3, 2021
  
             
Operating activities
            
Net earnings
  
$
216,719
    
$
165,024
  
Adjustments to reconcile net earnings to net cash provided by operating activities:
                
Depreciation and amortization
    
80,967
      
83,879
  
(Gain) loss on disposal of property and equipment
    
(293
)
    
(207
)
Inventory write-offs for obsolescence
    
10,777
      
9,550
  
Deferred income taxes
    
5,922
      
519
  
Other
    
6,733
      
5,758
  
  Change in U.S. transition tax liability
     (14,757 )     (14,757 )
  Change in repatriation tax liability
     (25,201 )     -  
Net change in operating assets and liabilities
    
(172,555
)
    
(74,983
)
Net cash provided by operating activities
    
108,312
      
174,783
  
                 
Investing activities
                
Capital expenditures
    
(95,700
)
    
(60,710
)
Proceeds from sale of property and equipment
    
377
      
234
  
Purchase of short-term investments
    
(7,769
)
    
(27,488
)
Maturity of short-term investments
    
66,763
      
53,679
  
Other investing activities
    
(199
)
    
347
  
Net cash used in investing activities
    
(36,528
)
    
(33,938
)
                 
Financing activities
                
Repurchase of convertible debt instruments
    
-
      
(300
)
Net proceeds on revolving credit lines
     6,000       -  
Dividends paid to common stockholders
    
(26,389
)
    
(25,216
)
Dividends paid to Class B common stockholders
    
(2,419
)
    
(2,298
)
Repurchase of common stock held in treasury
     (36,161 )     -
  
Distributions to noncontrolling interests
     (733 )     (800 )
Cash withholding taxes paid when shares withheld for vested equity awards
    
(2,123
)
    
(1,963
)
Net cash used in financing activities
    
(61,825
)
    
(30,577
)
Effect of exchange rate changes on cash and cash equivalents
    
(18,474
)
    
(3,383
)
                 
Net increase (decrease) in cash and cash equivalents
    
(8,515
)
    
106,885
  
                 
Cash and cash equivalents at beginning of period
    
774,108
      
619,874
  
Cash and cash equivalents at end of period
  
$
765,593
    
$
726,759
  

See accompanying notes.
10

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Equity
(Unaudited - In thousands, except share and per share amounts)

   
Common
Stock
    
Class B
Convertible
Common
Stock
    
Capital in
Excess of Par
Value
    
Retained
Earnings
(Accumulated
Deficit)
     Treasury Stock    
Accumulated
Other
Comprehensive
Income (Loss)
    
Total Vishay
Stockholders'
Equity
    
Noncontrolling
Interests
    
Total
Equity
  
Balance at December 31, 2020
  
$
13,256
    
$
1,210
    
$
1,409,200
    
$
138,990
     $ -    
$
13,559
    
$
1,576,215
    
$
2,800
    
$
1,579,015
  
Cumulative effect of accounting change for adoption of ASU 2020-06
    
-
      
-
      
(66,078
)
    
20,566
       -      
-
      
(45,512
)
    
-
      
(45,512
)
Net earnings
    
-
      
-
      
-
      
71,435
       -      
-
      
71,435
      
208
      
71,643
  
Other comprehensive income (loss)
    
-
      
-
      
-
      
-
       -      
(25,085
)
    
(25,085
)
    
-
      
(25,085
)
Issuance of stock and related tax withholdings for vested restricted stock units (149,722 shares)
    
15
      
-
      
(1,978
)
    
-
       -      
-
      
(1,963
)
    
-
      
(1,963
)
Dividends declared ($0.095 per share)
    
-
      
-
      
20
      
(13,777
)
     -      
-
      
(13,757
)
    
-
      
(13,757
)
Stock compensation expense
    
-
      
-
      
4,120
      
-
       -      
-
      
4,120
      
-
      
4,120
  
Balance at April 3, 2021
  
$
13,271
    
$
1,210
    
$
1,345,284
    
$
217,214
     $ -    
$
(11,526
)
  
$
1,565,453
    
$
3,008
    
$
1,568,461
  
Net earnings
    
-
      
-
      
-
      
93,192
       -      
-
      
93,192
      
189
      
93,381
  
Other comprehensive income
    
-
      
-
      
-
      
-
       -      
11,305
      
11,305
      
-
      
11,305
  
Distributions to noncontrolling interests
    
-
      
-
      
-
      
-
       -      
-
      
-
      
(800
)
    
(800
)
Dividends declared ($0.095 per share)
    
-
      
-
      
20
      
(13,777
)
     -      
-
      
(13,757
)
    
-
      
(13,757
)
Stock compensation expense
    
-
      
-
      
828
      
-
       -      
-
      
828
      
-
      
828
  
Balance at July 3, 2021
  
$
13,271
    
$
1,210
    
$
1,346,132
    
$
296,629
     $ -    
$
(221
)
  
$
1,657,021
    
$
2,397
    
$
1,659,418
  
                                                                         
Balance at December 31, 2021   $ 13,271     $ 1,210     $ 1,347,830     $ 401,694     $ -     $ (20,252 )   $ 1,743,753     $ 2,967     $ 1,746,720  
Net earnings     -       -       -       103,573       -       -       103,573       377       103,950  
Other comprehensive income (loss)
     -       -       -       -       -       (11,925 )     (11,925 )     -       (11,925 )
Issuance of stock and related tax withholdings for vested restricted stock units (189,731 shares)     19       -       (2,142 )     -       -       -       (2,123 )     -       (2,123 )
Dividends declared ($0.10 per share)
     -       -       22       (14,491 )     -       -       (14,469 )     -       (14,469 )
Stock compensation expense     -       -       3,842       -       -       -       3,842       -       3,842  
Repurchase of common stock held in treasury (513,227 shares)
     -       -       -       -       (9,873 )     -       (9,873 )     -       (9,873 )
Balance at April 2, 2022   $ 13,290     $ 1,210     $ 1,349,552     $ 490,776     $ (9,873 )   $ (32,177 )   $ 1,812,778     $ 3,344     $ 1,816,122  
Net earnings     -       -       -       112,388       -       -       112,388       381       112,769  
Other comprehensive income     -       -       -       -       -       (48,167 )     (48,167 )     -       (48,167 )
Distributions to noncontrolling interests     -       -       -       -       -       -       -       (733 )     (733 )
Issuance of stock and related tax withholdings for vested restricted stock units (11,308 shares)     1       -       (1 )     -       -       -       -       -       -  
Dividends declared ($0.10 per share)
     -       -       22       (14,361 )     -       -       (14,339 )     -       (14,339 )
Stock compensation expense     -       -       1,047       -       -       -       1,047       -       1,047  
Repurchase of common stock held in treasury (1,400,039 shares)
     -       -       -       -       (26,288 )     -       (26,288 )     -       (26,288 )
Balance at July 2, 2022   $ 13,291     $ 1,210     $ 1,350,620     $ 588,803     $ (36,161 )   $ (80,344 )   $ 1,837,419     $ 2,992     $ 1,840,411  

See accompanying notes.
11
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 1 – Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of Vishay Intertechnology, Inc. (“Vishay” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented.  The financial statements should be read in conjunction with the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.  The results of operations for the fiscal quarter and six fiscal months ended July 2, 2022 are not necessarily indicative of the results to be expected for the full year.

The Company reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscal quarter, which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31.  The four fiscal quarters in 2022 end on April 2, 2022, July 2, 2022, October 1, 2022, and December 31, 2022, respectively.  The four fiscal quarters in 2021 ended on April 3, 2021, July 3, 2021, October 2, 2021, and December 31, 2021, respectively. 

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation.

Note 2 – Impact of COVID-19 Pandemic

The Company's operations in the People's Republic of China, particularly in Shanghai, were impacted by COVID-19 government mandated shut-downs of our facilities in the second fiscal quarter of 2022.  The Company incurred incremental costs separable from normal operations that are directly related to the shut-downs, primarily wages paid to manufacturing employees during the shut-downs, additional wages and hardship allowances for working during lockdown periods, and temporary housing for employees due to travel restrictions, which were partially offset by government subsidies.  The net impact of the costs and subsidies are reported as cost of products sold ($6,661) and selling, general, and administrative expenses of ($546) based on employee function on the consolidated condensed statements of operations for the fiscal quarter and six fiscal months ended July 2, 2022.

12
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 3 – Leases

The net right of use assets and lease liabilities recognized on the consolidated condensed balance sheets for the Company's operating leases were as follows:

 
July 2, 2022
    
December 31, 2021
  
Right of use assets
            
Operating Leases
            
Buildings and improvements
  
$
107,605
    
$
112,951
  
Machinery and equipment
    
4,276
      
4,684
  
Total
  
$
111,881
    
$
117,635
  
Current lease liabilities
                
Operating Leases
                
Buildings and improvements
  
$
20,344
    
$
20,851
  
Machinery and equipment
    
2,390
      
2,541
  
Total
  
$
22,734
    
$
23,392
  
Long-term lease liabilities
                
Operating Leases
                
Buildings and improvements
  
$
90,379
    
$
97,890
  
Machinery and equipment
    
1,829
      
2,097
  
Total
  
$
92,208
    
$
99,987
  
Total lease liabilities
  
$
114,942
    
$
123,379
  

Lease expense is classified in the statements of operations based on asset use.  Total lease cost recognized on the consolidated condensed statements of operations is as follows:

 
Fiscal quarters ended
    
Six fiscal months ended
  
   
July 2, 2022
    
July 3, 2021
    
July 2, 2022
    
July 3, 2021
  
Lease expense
                        
Operating lease expense
  
$
6,304
    
$
6,248
    
$
12,756
    
$
12,400
  
Short-term lease expense
    
236
      
428
      
540
      
753
  
Variable lease expense
    
-
      
66
      
100
      
193
  
Total lease expense
  
$
6,540
    
$
6,742
    
$
13,396
    
$
13,346
  

The Company paid $12,241 and $12,176 for its operating leases in the six fiscal months ended July 2, 2022 and July 3, 2021, respectively, which are included in operating cash flows on the consolidated condensed statements of cash flows.  The weighted-average remaining lease term for the Company's operating leases is 8.6 years and the weighted-average discount rate is 5.3% as of July 2, 2022.

The undiscounted future lease payments for the Company's operating lease liabilities are as follows:

 
July 2, 2022
  
2022 (excluding the six fiscal months ended July 2, 2022)
  
$
11,879
  
2023
    
22,412
  
2024
    
20,002
  
2025
    
17,247
  
2026
    
15,522
  
Thereafter
    
57,740
  

The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the noncancellable term.  The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities.

13
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 4 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended July 2, 2022 and July 3, 2021 reflect the Company’s expected tax rate on reported income before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates. 

The Company repatriated $81,243 to the United States in the second fiscal quarter of 2022 pursuant to the repatriation program initiated in response to a change in Israeli tax law.  The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25,201 due to the repatriation.  Tax expense for the repatriation was recorded in 2021 when the tax law was enacted.

During the six fiscal months ended July 2, 2022, the liabilities for unrecognized tax benefits decreased by $5,102 on a net basis, primarily due to payments and currency translation adjustments, partially offset by accruals for current year tax positions and interest.

Note 5 – Long-Term Debt

Long-term debt consists of the following:

 
July 2, 2022
    
December 31, 2021
  
             
Credit facility
  
$
6,000
    
$
-
  
Convertible senior notes, due 2025
    
465,344
      
465,344
  
Deferred financing costs
    
(8,042
)
    
(9,678
)
     
463,302
      
455,666
  
Less current portion
    
-
      
-
  
   
$
463,302
    
$
455,666
  

The following table summarizes some key facts and terms regarding the outstanding convertible senior notes due 2025 as of July 2, 2022:

 
Convertible
Senior Notes
Due 2025
  
Issuance date
  
June 12, 2018
  
Maturity date
  
June 15, 2025
  
Principal amount as of July 2, 2022
  
$
465,344
  
Cash coupon rate (per annum)
    
2.25
%
Nonconvertible debt borrowing rate at issuance (per annum)
    
5.50
%
Conversion rate effective June 16, 2022 (per $1 principal amount)
    
32.0005
  
Effective conversion price effective June 16, 2022 (per share)
  
$
31.25
  
130% of the current effective conversion price (per share)
  
$
40.63
  


Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) during any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions.  The convertible senior notes due 2025 are not currently convertible.

Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock.

The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior notes due 2025 effective as of the ex-dividend date of each cash dividend.  The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock.

14
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 6 - Stockholders' Equity

On February 7, 2022, the Company's Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.  The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases.

The following table summarizes activity pursuant to this policy:

   
Fiscal quarter ended
      Six fiscal months ended  
   
July 2, 2022
     July 2, 2022  
Dividends paid to stockholders
    $
14,339
    $ 28,808  
Stock repurchases
    
26,288
     36,161  
Total
    $
40,627
    $ 64,969  

The repurchased shares are being held as treasury stock. The Company records treasury stock at cost, inclusive of fees, commissions and other expenses, when outstanding common shares are repurchased.  As of December 31, 2021, no shares of common stock were held as treasury stock.  As of July 2, 2022, 1,913,266 shares of common stock are being held as treasury stock.

Note 7 – Revenue Recognition

Sales returns and allowances accrual activity is shown below:

 
Fiscal quarters ended
    
Six fiscal months ended
  
   
July 2, 2022
    
July 3, 2021
    
July 2, 2022
    
July 3, 2021
  
Beginning balance
  
$
39,161
    
$
34,449
    
$
39,759
    
$
39,629
  
Sales allowances
    
19,040
      
22,043
      
46,417
      
45,839
  
Credits issued
    
(16,569
)
    
(15,350
)
    
(44,295
)
    
(43,796
)
Foreign currency
    
(857
)
    
120
      
(1,106
)
    
(410)
  
Ending balance
  
$
40,775
    
$
41,262
    
$
40,775
    
$
41,262
  


Note 8 – Accumulated Other Comprehensive Income (Loss)

The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows:

 
Pension and
other post-
retirement
actuarial
items
    
Currency
translation
adjustment
    
Total
  
Balance at January 1, 2022
  
$
(